Agreement in Principle (AIP)

What AIP stands for

AIP is short for Agreement in Principle. It is a statement from a lender that, based on what you have told them and a credit search, they would in principle be willing to lend you up to a stated amount.

Lenders use different names for the same document. A DIP (Decision in Principle), MIP (Mortgage in Principle), Mortgage Promise and AIP are all the same thing — the only difference is which lender you are talking to. If an estate agent asks for an AIP and your lender has given you a DIP, it counts.

What an AIP checks

An AIP is a light-touch assessment. You give the lender your gross income, your regular commitments (loans, credit cards, childcare, maintenance), your deposit and your address history, and the lender runs a credit search. It then applies its income multiple and a simplified version of its affordability model to produce a maximum figure.

Most high-street lenders now run a soft credit search for an AIP, which other lenders cannot see and which does not affect your score. A few still run a hard search. If you are planning to shop around, ask which kind a lender uses before you apply, because several hard searches in a short window can dent your file.

How long an AIP lasts

Typically between 30 and 90 days, depending on the lender. After that it expires and you will need a new one. Re-running it is quick, but if your circumstances have changed — a new job, a bigger loan, a change in the deposit — the new figure may be different.

What an AIP is not

It is not a mortgage offer, and it is not a guarantee. At full application the lender verifies your documents, values the property, and runs its complete affordability model rather than the simplified AIP version. The figure can go down at that stage, and occasionally the application is declined altogether. Why your DIP came in lower than expected explains the most common reasons.

It is also lender-specific. One lender’s AIP tells you nothing about what another would offer, and on the same details the gap between lenders is often large. Why lenders offer different amounts covers the reasons.

What you need to get one

• Personal details and three years of address history
• Gross annual income, including any bonus, overtime or commission you want counted
• Monthly commitments: loans, credit cards, car finance, childcare, maintenance
• Deposit amount and where it is coming from
• The purchase price and loan you have in mind, if you know them

You do not usually need to send documents at the AIP stage. Payslips, bank statements and ID come at full application.

When to get one

Before you start viewing seriously. Most estate agents will ask to see an AIP before they pass an offer to the seller, and some will not book viewings without one. It also gives you a realistic budget rather than a guess.

If you want a borrowing figure before committing to any single lender’s search, you can check mortgage eligibility without a credit check first, then get an AIP from the lender that comes out best.

AIP vs DIP vs MIP

There is no difference. AIP, DIP, MIP and Mortgage Promise are interchangeable names for the same initial lender decision. Use whichever your lender uses.